Freedom of Expression Transparency Report

Resolution Text

In June 2021, the American Civil Liberties Union launched a campaign1 calling on PayPal to provide nondiscriminatory financial services to all users. ACLU argued that accountability on human rights, civil liberties, and sound technology policy necessitates that PayPal provide transparency to users. If PayPal decides to close an individual or business account, PayPal must provide meaningful notice about the particular Terms of Services provision that was violated, and users should have the opportunity to appeal in a timely and efficient manner.

In addition to blocking the accounts of sex workers,2 PayPal routinely targets users for speech protected by the First Amendment3 including:

Freezing the account4 of News Media Canada for a payment to submit an article about Syrian refugees for an award;
Terminating service5 to a user for using open-source software enabling anonymous communication; • Stalling6 efforts to provide bail support to protestors;
Banning legal sex workers access to services, which disproportionately harms Black, Brown and trans communities.7

As Electronic Frontier Foundation notes,8 because a few companies dominate online payment processing, PayPal wields tremendous power to control the speech environment by turning off the financial faucet for users who express disfavored views or discuss controversial subject matter. Merchants and individuals on PayPal’s blacklist may find themselves in a financially precarious situation since payment platforms are extremely centralized, creating what in practice is a duopoly. Any argument that those dissatisfied with PayPal’s terms and conditions should simply seek other payment methods is not particularly realistic.

PayPal’s 2021 Global Impact Report touts its commitment to “[b]uilding a digital economy that powers a more inclusive and resilient world,” and yet that report fails to include any information relevant to account suspensions or actions that may chill free speech.9

PayPal’s poor transparency reporting veils the contradiction between PayPal’s human rights policy and account suspensions and other potential violations of freedom of speech. This poses significant legal, reputational, and financial risk to PayPal and its shareholders.

RESOLVED: Shareholders request the Board revise PayPal’s Transparency Reports to provide clear explanations of the number and categories of account suspensions and closures that may reasonably be expected to limit freedom of expression or access to information or financial services. Such revision may exclude proprietary or legally privileged information.

Supporting Statement

Proponents suggest the company include in its Transparency Reports, or explain why it cannot disclose:

The substantive content of account suspension decisions, by country, including which individuals or businesses made requests; number of accounts removed by category such as “encrypted communications,” VPN, etc.; and external legal or policy basis and internal company criteria for removals;
Any indicia of impact, such as the number of prior account suspension warnings and whether existing usage of the account was eliminated;
Any efforts by the company to mitigate the harmful effects.

1 https://www.aclu.org/news/lgbtq-rights/paypal-and-venmo-are-shutting-out-sex-workers-putting-lives-and- livelihoods-at-risk
2 https://www.bloomberg.com/news/articles/2019-11-14/porn-site-says-paypal-ban-will-hurt-more-than-100-000- performers
3 https://www.thefire.org/research-learn/fire-statement-free-speech-and-online-payment-processors
4 https://www.cbc.ca/news/canada/manitoba/paypal-freezes-flin-flon-newspaper-syrian-refugees-1.3977292
5 https://www.eff.org/deeplinks/2021/06/paypal-shuts-down-long-time-tor-supporter-no-recourse
6 https://www.vice.com/en/article/k7qbnz/venmo-paypal-freeze-transfer-limits-bail-funds
7 https://www.aclu.org/news/lgbtq-rights/sex-work-is-real-work-and-its-time-to-treat-it-that-way/
8 https://www.eff.org/deeplinks/2016/02/kafkaesque-battle-soulseek-and-paypal-and-why-free-speech-defenders- should-be
9 https://s201.q4cdn.com/346340278/files/doc_downloads/PayPal-2021-Global-Impact-Report.pdf